Oil Takes A Hit, Down 3%

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Updated: The price of oil fell 3% today, closing to $66.12, in response to a few key events.

Total U.S. demand dropped 900,000 barrels per day from the week prior, and is at a 10 year low, according to data released by the EIA today. The U.S. stockpiles of crude grew this week by 2.9 million barrels to 366 million barrels, due to a jump in imports.

What spurred those imports? According to Platts, “Crude imports into the Gulf Coast rose 558,000 b/d to 5.7 million b/d, likely the result of previously-held oil in floating storage being offloaded.  The narrowing of the New York Mercantile Exchange (NYMEX) crude oil futures contract front-month spreads has made it uneconomic to continue to hold oil on tankers out in the Gulf of Mexico.”

Two other factors: The dollar is performed well today, and the broader market dropped.

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